Thursday, July 22, 2010

The Importance of Good Faith

I'm sure there's a need for prisoners to have banking services, but one would think security would be a high priority at such an institution. From the Wall Street Journal:
Dwelling House Savings & Loan Association, one of the country's few institutions to provide bank accounts to prisoners, failed last year after regulators warned the Pittsburgh S&L that its computer systems were vulnerable. Dwelling House was later hacked by cyber-thieves, who siphoned as much as $4 million out of its coffers.

Most criminals are truly stupid--unintelligent, uneducated--because criminality tends to not payoff in the long run, and stupid people overweight the short-run payoff. One might therefore conclude that computer theft would not be a concern, but this highlights that bad faith is very important because if there's a will, there's a way. Knowing your customer, or adversary, is very important because their end game often predicts tactical behavior.


J said...

In general, it is advisable to avoid doing business with dishonest people. But in this case it is not clear that the client base had something to do with the bank robbery.

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